GLENCORE has announced that it has set aside $1.5 billion (R22.6bn) to settle corruption probes in the US, UK and Brazil as the world’s largest commodity trading house reported bumper annual results and delivered a dividend bonanza.
The commodities giant, which is subject to several investigations over bribery and market manipulation in South America and Africa, said the probes were set to be concluded this year. Despite the legal woes, shareholders received a cash windfall.
Releasing its results for the year to December, Glencore said it had reduced net debt from $9.8bn to $6bn due to strong cash generation, and below the group’s newly adopted cap of $10bn, which paved the way for $4bn in shareholder returns, of which $550m was in share buy-backs, equal to $0.04 cents per share in value. The base dividend was, therefore, $0.26c per share or $3.4bn.
Glencore also recorded a strong performance at the group’s marketing and industrial assets, the latter recording a 118percent jump in year-on-year earnings before interest, tax, depreciation and amortisation (Ebitda) of $17.1bn.
Chief executive Gary Nagle said: “In spite of the ongoing challenges of Covid-19, 2021 was an extraordinary year for Glencore, reflecting rising demand for our metals and energy products, record adjusted Ebitda, and the transition to new leadership.
“Against the strong commodity backdrop, and leveraging the unique combination of our transition and energy commodities, along with the global reach and scale of our marketing business, the group delivered an 84 percent increase in adjusted Ebitda to $21.3bn.”
Nagle said the company remained focused on its strategy to enable and deliver decarbonisation and meet the increasing demand for everyday metals, while responsibly meeting the energy needs of today.
“We look to the future confident that we have the right pathway to succeed in a net-zero economy and create sustainable long-term value for all stakeholders while operating responsibly across all aspects of our business,” he said.
The group had committed to total emissions (Scope 1, 2 and 3) reductions, relative to 2019, of 15 percent by 2026 and 50 percent by 2035 and said it had an ambition to achieve net zero total emissions by 2050.
Glencore has been under fire for keeping its coal assets.
Activist investor Bluebell Capital Partners asked Glencore in November to create a new structure, to responsibly run down coal assets and decarbonise its energy footprint.
It advised that a new structure would cut Glencore’s coal exposure to a minimum and help reduce the discount its shares trade at, compared to peers who had exited coal.
BUSINESS REPORT ONLINE